IOTA’s Web3 IDV project one of 20 projects invited to play in EU sandbox

The European Blockchain Regulatory Sandbox has selected the use cases to be featured in its second cohort of sandbox dialogues. A release from the European Commission lists the 20 use cases chosen from a pool of 60 applicants based on the maturity of the business case, legal and regulatory relevance, and alignment with the EU’s wider policy priorities.

Fintech, secure data sharing, real estate trading, public security, trust registries, AI and electronic-voting-focused firms are all represented on the EU blockchain list, alongside digital identity verification and authentication providers.

IOTA’s token-based KYC system provides end-to-end reusable IDV

Among selected projects is the Web3 Identification Solution – “a cutting-edge user authentication system designed to meet the demand for reliable identity verification tools in the Web3 space,” developed by the IOTA Foundation, walt.id, IDnow, Bloom Wallet and HAVN.

A blog post on IOTA’s website celebrating the sandbox selection calls it “a significant milestone” that “opens the door to regulatory discussions about KYC and privacy in a Web3 environment.”

“Traditional KYC processes have long been plagued by inefficiencies, high costs, and data privacy concerns,” says the post. “In collaboration with our partners, we have developed a reusable KYC system to identify Web3 users in a seamless and privacy-preserving way. Our solution enables users to maintain control over their data by leveraging distributed ledger technology (DLT) and tokenization of the KYC process.”

IDnow provides verification, walt.id tokenizes it, and the credential is stored in Bloom Wallet, where it can be used and reused to prove ID verification without disclosing any private information. HAVN facilitates interchain communication and transaction validation.

Another project on the list, EBSI-Vector’s project to explore wallets and verifiable credentials, also touches on familiar ground. And Konnecta Systems’ Trevo electronic voting project leverages decentralized identities and zero-knowledge proofs (ZKPs) for election tools.

“Together with our partners,” says IOTA, “we continue to push the boundaries of technical and regulatory development in Web3, and we look forward to demonstrating our seamless KYC solution for decentralized finance and other Web3 applications.”

The consortium is also working to make crypto asset service providers (CASPs) compliant with the European AML Regulation and the Transfer of Funds Regulation.

Article Topics

digital identity  |  European Blockchain Regulatory Sandbox  |  identity verification  |  IDnow  |  IOTA Foundation  |  KYC  |  reusable identity  |  walt.id  |  web3